The Application of a Salt-Free High Performance Water Base Mud for Minimizing Environmental Impact in The

Oriente Ecuadorian Basin Mario A Ramirez, Pablo Benalcazar and Diego Paz

Baker Hughes Drilling Fluids

ABSTRACT The application of inhibited fluids containing salts has been an extended practice in the

Ecuadorian Basin. However, the environmental regulations have changed in the last few years in Ecuador and there is a particular concern about the disposal of cuttings with high concentrations of salts. A typical approach to this problem has been the use of containing no chlorides, such as potassium nitrate and potassium Sulphate. However, an addition to the extra cost, there are additional concerns with the nitrate and sulfate ions that remain in the cuttings. A new drilling fluid has been proposed and applied with success and introduced as a novel technology that doesn’t compromise wellbore stability while it addresses environment concerns.

The novel approach focuses on the environment in two ways. On one hand, the well bore stability

achieved along the wells minimizes the volume of cuttings generated thus decreasing the dilution requirements. On the other, both the liquid and solid waste does not require additional treatment for proper disposal.

The inhibited part of the system consists of polymers of aluminum-silicates which resembles the

structure of the natural clays . The product used for controlling both the swelling and non-swelling clays becomes part of the clay structure and can be disposed while complying with the environmental regulations. Although the system design considers the wellbore stability as a basis of design for minimizing waste generation, this paper focuses on its environmental benefits. The operational benefits resulting from wellbore integrity has been the subject of another paper.

The paper presents waste volumes and waste disposal cost data that compares the application of potassium salts with the application of aluminum complex.

INTRODUCTION A multitude of new drilling fluid products, systems and treatment processes have been

developed in the recent years in response to increasingly stringent environmental regulations. New water-based mud systems are approaching the performance levels typical of conventional oil-base muds, levels largely achieved by the new syntethic-base fluids. However, drilling fluids performance is not the only aspect to be consider. For instance, potassium/polymer muds would play a most important role in reducing shale stability problems in many areas around the world. Unfortunately the LC-50 limitation essentially eliminated potassium from use in the Gulf of Mexico in the quantities thought necessary to achieve the desired performance. High salt (sodium chloride) polymer muds are now being used in the Gulf of Mexico instead of more effective potassium systems. Potassium muds are being used in the North Sea and other areas where regulations are not biased against the addition of potassium to seawater.

Regulations in land operations also had different requirements and the use of salts is generally prohibited due to cuttings contamination. In addition to this, the waste waters are usually returned after proper treatment to the rivers making the requirements even more stringent. This phenomenon is particularly critical in the jungle of the Amazonian basin, a natural reserve that has the largest variety of fauna and flora in the world. The Amazonian basin covers a large portion of south America east of the Andean mountains covering of the countries of Colombia, Ecuador, Peru and Brazil. Of particular importance in the Ecuadorian basin is the presence of multiple native communities still untouched by the modern world, which live around the exploration and production areas of the country. .. ..

Waste discharge of salt inhibited muds in marine waters is accepted in many exploration areas around world on the basis that there is minimum impact of discharging small amounts of waste into a large reception body.. In the case of land operations in the tropical rainforest, the environmental impact of salt waters in the rivers is significant. Several studies and extended field experience have demonstrated the adverse effects of using potassium-based systems in the area. In such cases both the mud toxicity and the excess of waste contributed to a substantial increase in the negative environmental effects of salt inhibited drilling fluids.

The drilling fluids industry has been taking steps to reduce the environmental impact of discharging fluids and cuttings by replacing the more toxic fluid components with less toxic ones, by reducing the total waste volume through improved drilling and waste disposal practices, and by promoting the processing and reuse of drilling fluids. When trying to reduce the environmental impact, drilling fluids companies usually face a trade off between addressing the qualitative vs. the quantitative aspects of the fluid. That is, by using less inhibitive muds with low toxicity levels there is less risk of pollution from the type of products used but the dramatic increase in the volume of waste has highly detrimental effects on the environment. On the other hand, a highly inhibitive mud reduces the volume of fluid and cutting waste but increases its negative effects by means of a more hazardous composition.

The novel approach taken in the Ecuadorian basin was to decrease fluid toxicity without compromising the objectives of waste disposal minimization and optimum drilling performance. The Aluminum complex system that forms the core of the fluid design is able to maintain wellbore stability while drilling troublesome shale sections. This excellent stability minimizes the need for continuous reaming and backreaming operations that are required when drilling with fluids traditionally employed in the area. Consequently, a proper fluid design controls and reduces the excessive volumes of waste that have characterized these wells in the past..

ALUMINUM CHEMISTRY The versatility of aluminum chemistry can be discussed in the context of general

characteristics of this element. Various aspects of aluminum chemistry11-12 featured in drilling applications include: • Aluminum can exist as compounds that may be soluble or insoluble in water (Table 1) depending

on the counter ion and solution pH. • Aluminum ions, formed by the dissolution of soluble aluminum salts, exist as hexahydrate ions in

an octahedral configuration (Fig. 2). The high charge of aluminum ions results in the loss of hydration shell protons that produces a series of hydrolysis products (Fig. 3). Aluminum induced hydrolysis produces acidic solutions for virtually all water-soluble salts.

• Aluminum exhibits a complex, pH-dependent chemistry in aqueous systems and the ability to produce important effects from either acidic or alkaline aluminum sources. Solutions of aluminum salts contain only Al(H2O)6

3+ at pH values below 3. When pH values are between three and five, aluminum species are distributed between a mixture of hydroxo species including Al(OH)2+ , Al(OH)2

+, and various polynuclear (containing two or more aluminum atoms) cations. At pH values between 5 and 6, Al(OH)3 appears. As the pH becomes more alkaline, Al(OH)4

– becomes dominant.

• Under appropriate conditions, aluminum forms an amphoteric hydroxide which at higher pH forms soluble tetrahydroxyaluminate anion (Fig. 4).

• Aluminum hydroxides exist in several crystalline or amorphous forms (Fig. 5). • Wellbore stability is enhanced by precipitation of aluminum hydroxides within shale pore throats

and micro-fractures.

ALUMINUM MECHAMISM FOR STABILITY AND WASTE MINIMIZATION

The environmental impact of drilling fluids is determined by two main variables: the volume of of solid and liquid waste and the toxicity of the same. The quantity of waste depends on the volume of drill solids generated while drilling the well. When drilling troublesome shales like those encountered in the Ecuadorian basin, wellbore stability plays an important role in both drilling efficiency and waste disposal. The amount of solids waste is significantly increased while attempting to control wellbore instability problems by conducting continuous reaming operations that increase the hole diameter and therefore the load of solids incorporated to the mud. The dilution rates required to handle the additional load of solids also increase the volume of liquid waste. Under these circumstances, a preventative approach that carefully designs the drilling fluid is preferred over a remedial one. Contrary to other areas around the world, the use of potassium based systems in the area has demostrated to be the cause of wellbore stability problems and the subsequent increase of environmental impact.

The aluminum chemistry approach to shale stability is based on changing the physico-chemical behavior of the shale. Contrary to the widely investigated ionic exchange between fluid and shale, this approach is based on aluminum chemistry designed to precipitate as aluminum hydroxide which may eventually become incorporated into the mineral matrix of the formation. This aluminum precipitate greatly enhances the stability and physical strength of a sensitive shale section and forms a physical barrier to further filtrate invasion of the shale.

The aluminum hydroxide complex (AHC) dissolves in the aqueous drilling fluid and generates tetrahydroxyaluminate ions, Al(OH)4

–. Chemical literature implies that the tetrahydroxyaluminate anion is the dominant soluble species for the drilling fluid environment.14 As AHC is added the drilling fluid, aluminate immediately enters solution. AHC treatments will generate a mud pH of 10 to 12, depending on the quantity added. The mud pH will determine the distribution of tetrahydroxyaluminate and aluminum hydroxide. If sufficient AHC is maintained in the mud, excess tetrahydroxyaluminate will be present in the filtrate. When exposed to a lower shale pH, aluminum hydroxide [Al(OH)3] will precipitate from the filtrate. Precipitation is accelerated when the alkaline mud filtrate is exposed to connate water, possessing pHs as low as 4 to 5, in the shale microfractures. Aluminum hydroxide may exist as an amorphous precipitate or in a variety of crystalline forms such as: gibbsite, bayerite, nordstrandite, boehmite or diaspore. The type of aluminum hydroxide that forms is dependent on many factors including temperature as well as other ingredients in the fluid such as electrolytes and organic acids.15-

20 Under certain conditions, the aluminum hydroxide may initially precipitate in one form but later change to another form or allotrope. Because hydroxides and aluminate are the most common aluminum species at typical drilling fluid pH levels, the generation of aluminum hydroxides from aluminate is the critical process in AHC mud systems. This prevents hydration and enhances borehole stability. This same hypothesis explains the stabilizing effects of mud filtrate on shale cores. The filtrate is exposed to a lower pH environment when it penetrates into the shale wall and microfractures, causing the excess AHC in the mud filtrate to precipitate as hydroxides along the filtrate front (Fig. 6). The precipitated hydroxides may eventually change to crystalline forms. Subsequently, the aluminum hydroxides may become part of the shale crystal structure, helping stabilize the shale. This chemical process would greatly reduce the induced pore pressure transmission inside the shale microfractures.

ALUMINUM CHEMISTRY AND THE ENVIRONMENT Only leaching by strong acids results in the transport of ecologically significant concentrations

of aluminum to surface waters. The speciation of Al in surface waters is a function of many factors, including the supply of ligands and Al, pH, concentration of complexing ligands. One of the most significant reactions involving Al is complexing with organic ligands. The Al mobilized to surface waters is neutralized and immobilized by basic cations and retention of strong acid anions (e.g., SO4, NO3), and biological processes in saturated soil/sediments. Natural organic substances (fulvic and humic acids), dissolved in surface waters has been found to complex a significant proportion of dissolved Al content of such waters.. The organic substances of various types also play important role in the complexation of Al in soils and sediments. They are of great importance in modifying the reaction of Al on clays and acid soils. The adsorption of polynuclear and monomolecular Al onto soil constituents is reported to be affected by the surface properties of the constituents as well as the presence of associated systems that compete for Al. The adsorbed Al has been reported to affect both the chemical and physical properties of clays and soils. Most noted chemical changes are CEC reduction and improved catalytic and adsorbant properties. Most noted physical changes are increased aggregate stability and enhanced colloidal interaction. The Kaolinite fixes more Al more rapidly and with greater reduction in CEC than any other clay when compared on a unit CEC basis. The reason for these unexpected strong reactions of Kaolinite with Al most lie in the nature of bonding sites.

The presence of Al in surface waters as a consequence of natural soil acid lixiviation is much more important than Al originated by waste waters containing Al complex included in drilling formulations. Despite of being a source of Al, the presence of fulvic and humic acids in natural waters are buffers and immobilize the Al. In addition to this the Al complex used in drilling fluids contains humic acid in the formulation to sequester excess of Al in waste waters.

ENVIRONMENTAL COMPLIANCE The Aluminun complex has been tested for environmental compliance in both the Gulf of

Mexico and the Uk sector of the North Sea. Chrome-free ligonosulfonate containing 6.0 ppb of Aluminum Complex was tested for 96-hour

LC-50 using an EPA protocol for toxicity testing of drilling fluids. The results from this test indicated a LC-50 greater than 100%(>1,000,000 ppm SPP) using the Moving Average Method calculations. Copper was used as a reference toxicant which indicates a 48 hr LC-50 0f 263 ųg/l with an 89% confidence level. An HTHP drilling fluid containing 3.0 ppb of Aluminum Complex indicated an LC-50 greater than 100% (1,000,000 ppm SPP) as well.

A study was made to investigate the acute toxicity of Aluminum Complex to turbot (scopthalmus maximus) by using the 96 hour medium lethal concentration, which is defined as the concentration which kills 50%, of exposed fish after 96 hour exposure period at 15º C. The results indicate that at a concentration of 1,800 mg/l, the Aluminum Complex is non-toxic to turbot. Therefore the LC-50 at 24 to 96 hours was estimated as > 1,800mg/l. A mortality of 0% was observed in the control tank at the end of the test period. The test was conducted as per OECD guidelines for testing chemicals fish acute Toxicity test.

A sample of Aluminum Complex was tested for a 10-day Static Sediment Toxicity by using Corophiun volutator as required by CHARM 2.1 (chemical Hazard Assessment and Risk Management of Offshore Exploration & Production Chemicals). CHARM 2.1is accepted as the U.K. protocol for toxicity testing of drilling fluid chemicals. The results from this test indicate a 10-day LC-50 of >60,000 mg/l using the Moving Average Method calculation. Cadmium chloride was used as a reference toxicant which indicates LC-50 of 10.4 mg/l.

A sample of Aluminun Complex was tested to observe the effects on Skeletonema Costatum in a Marine algae growth inhibition test. The testing was conducted in accordance with Good Laboratory

Practices and ISO Protocol ISO/TC 147/SC 5 Marine Algal Growth Inhibition Test. After 72 hours, the EŢC50 was determined to be 319,018 mg/l using the Linear Interpolation Method of calculation. Potassium dichromate resulted in a EŢC50 of 2,2892 mg/l under the same test conditions.

The toxicological and Ecological data of Aluminum Complex is indicated in Table 3, as well mud formulation for EPA test (Table 4).

FIELD EXPERIENCE

The wells located in the eastern part of Ecuador presented significant challenges while drilling the Napo shale formation. The use of potassium based systems lead to two sidetracks in the first well drilled in the Yuralpa field. The wellbore problems increased the drilling cost and, in particular, the waste disposal cost caused by the excess of drill solids that required massive mud dilutions.

The Aluminun-Based fluids were introduced in 2000 by the operator to replace salt inhibited drilling fluids that had caused severe wellbore instability problems. Since then, more than thirty (30) wells that include multiple directional and horizontal sections have been drilled very successfully. Figure 11 shows the learning curve for the application of the new system as compared with the conventional inhibited potassium system. Optimized drilling fluid design has been minimized reaming and back reaming operations due to enhanced wellbore stability. The excess of waste generated during those operations in another areas of Ecuadorian basin significantly increase the environmental impact. The waste volume generated in the field is very consistent and averages 0.9 bbl of waste per foot of well drilled. (Fig.12). A typical mud formulation used in the Ecuadorian basin appears in Table 2.

THE NEW FRONTIER OF ALUMINUM CHEMISTRY TO IMPROVE ENVIROMENTAL QUALITY- HIGH PERFORMANCE WATER BASED MUD (HPWBM)

The high performance term suggests that a HPWBM will deliver a level of performance beyond what is currently attainable using conventional water base mud. Researchers and engineers often focus on delivering a single, specific performance attribute when designing water-based alternatives to emulsion–based fluids. The addition of an ROP enhancer to a water-based mud may deliver drilling rates equivalent to those of an OBM or SBM; however, it is unlikely that it alone will match the overall drilling performance of emulsion muds.

In departure from conventional approaches, the HPWBM design team focused on delivering a high performance system rather than a novel product. The first step of the development process centered on identifying the drilling attributes of emulsion systems that make them so attractive for challenging wells operations. The key attributes of emulsion systems were identified as: 1) shale stability. 2) clay stability. 3) cuttings stability. 4) rates of penetration. 5) bit balling and accretion. 6) torque and drag.

The next stage was to research and identify the mechanisms by which the emulsions delivered these attributes, and then to duplicate them in a HPWBM. It was immediately recognized that simply combining existing products would not work and that a step-change in design approach was required to achieve the desired results. The design team recognized and accepted that some required technology may not be available in current oilfield chemical use and would be accessed from non-oilfield industries. This lead to a very time-consuming process of research, product screening, system compatibility and environmental compliance testing specifically for the new system.

The outcome of this work is a new HPWBM based on a system design approach whereby state-of-the art technology is combined in a system designed to emulate the key drilling attributes of emulsion base muds. The system is based on a novel “total inhibition” concept, whereby shale, clay and cuttings stability are systematically provided along with benefits in key areas such as ROP, accretion control and torque and drag reduction. The uniqueness of the system is such that it has been awarded a US patent. The new system delivers performance approaching that of emulsion muds systems, while offering complete environmental compliance in all key exploration areas around the world.

The novel HPWBM is a new step in the development of Aluminum based drilling fluids that emulate the drilling performance of oil-based muds without the concerns of environmental liability. The mud system is also a major step towards a better environmental performance based on a superior wellbore stability and cuttings inhibition that reduce mud dilution rates and volumes of waste for disposal. Additionally, the system has passed all the necessary toxicity tests established in the environmental regulations of the Gulf of Mexico and the UK sector of the North Sea. In particular, the application of this system in land operations requires the use of a salt-free HPWBM combined with the superior technology of aluminum.

CONCLUSIONS

1. The use of conventional salt-inhibited water-based muds to drill the challenging wells of the Ecuadorian sector of the Amazonian basin based is not an option. The potassium-based mud systems usually considered the best for fluid inhibition, have produced severe wellbore instability problems that have increased the overall drilling costs. In addition, the environmental impact is significantly amplified due to the excessive volume of waste fluid and drill cuttings.toxicity Attempts to replace chloride salts with nitrates and sulphates have also failed.

2. The reason for that unexpected behavior is the incompatibility between potassium and Kaolinitic shales that lead to wellbore instability, long reaming operations and expensive sidetracks.

3 A novel approach was introduced in the first well of the project and consisted of an aluminum complex, sealing agents, extreme pressure lubricants and an ROP enhancer.

4 The application of Aluminum chemistry for stability has been decreased the waste volume from 2.5 bbl per foot drilled while using potassium inhibited fluid to an average of 0.9 bbl of waste per hole drilled

5. The mud system is environmentally friendly in two ways: 1) no chloride salts are used for inhibition, and 2) reduced cuttings generation from wellbore stability that occurs since the aluminum hydroxide precipitates are compatible with formation geology, and then the precipitates are incorporated into the shale crystal structure formed by alumino-silicates.

6. Although further improvements to this new water-based system are anticipated, this system is a first step toward changing the paradigm of oil-based mud as the only solution for wellbore problems.

7. Operators must strike a balance between the environmental benefits and the availability of more reliable formation evaluation with the increased operational risks associated with the use of a water-based mud.

8. A new generation of HPWBM based in the same chemistry has been developed to emulate the performance of oil emulsion systems. Due to this enhanced performance the system will provide environmental quality improvements in two dimensions: 1) The possibility of substituting oil-based muds in challenging wells 2) the improvement in drilling efficiency with better wellbore stability that optimizes waste disposal volumes.

References

1. Dye, B., Clapper, D., Hansen, N., Leaper, R., Shoults, L., Otto, M., Xiang, T., and Gusler, W.: “Design Considerations for High Performance Water-Based Muds,” AADE-04-DF-HO-14, AADE Drilling Fluids Conference, Houston, Texas, April 6-7, 2004.

2. Ramirez, M.A., Capacho, C., Osorio,J., and Kenny,P.: “Replacing Potassium with Aluminum Complex Overcomes Wellbore Stability Problems In Kaolinitic Shales in South America,”AADE-04-DF-HO-17, April 4-, 2004, Houston, Texas.

3. Ramirez,M.A., Sanchez, G., Luna,E., Clapper, D., Preciado, O, and Santamaria.,J.: “Aluminum-Based HPWBM Successfully Replaces Oil-Base Mud to Drill Exploratory Wells in an Environmental Sensitive Area,” SPE 94437. Latin American Petroleum Conference, Rio de Janeiro, Brazil, June 2005.

4. Clapper, Dennis K., Halliday, William S., and Xiang, Tao: “Advances in High Performance Water-Based Drilling Fluid Design,” 2001-13, CADE/CAODC Drilling Conference, Calgary, October 23-24, 2001.

5. Clapper, Dennis K., Halliday, William S., and Xiang, Tao: “Advances in High Performance Water-Based Drilling Fluid Design,” 2001-13, CADE/CAODC Drilling Conference, Calgary, October 23-24, 2001.

6. Sposito, Garrison, The Environmental Chemistry of Aluminum, second edition, CRC Press, New York (1996), 39.

7. Baes, C.F, Jr. and Mesmer, R.E: The Hydrolysis of Cations, John Wiley & Sons, New York (1976), 112.

8. Benaissa, Saddok. And Clapper, D.K.: “Oil Field Applications of Aluminum Chemistry and Experience with Aluminum-Based Drilling Fluid Additive,” SPE 37218, SPE International Symposium on Oilfield Chemistry, Houston, February 18-21, 1997.

9. Glastonbury, J.R.: “Nature of Sodium Aluminate Solutions”, Chemistry and Industry (Feb.1 1969), 121.

10. Marion, Stephen P. and Thomas, Arthur W.: “Effect of Diverse Anions on the pH of Maximum Precipitation of Aluminum Hydroxide,” J. Colloid Interface Sci. (1984), 102 (1), 221.

11. Van Staten, H.A. Holkamp, B.T.W., and deBrun, P.L.: “Precipitation from Superstaturated Aluminate Solutions, I. Nucleation and Growth of Solid Phases at Room Temperature,” J. Colloid Interface Sci. (1984), 98 (2), 342.

12. Van Staten, H.A. and deBrun, P.L.: “Precipitation from Superstaturated Aluminate Solutions, II. Role of Temperature,” J. Colloid Interface Sci. (1984), 102 (1), 260.

13. Violante, A., and Violante, P.: “Influence of pH, Concentration, and Chelating Power of Organic Anions on the Synthesis of Aluminum Hydroxides and Oxyhydroxides,” Clays Clay Miner. (1980), 28, 425.

14. Violante, A. and Huang, P.M.: “Influence of Inorganic and Organic Ligands on the Formation of Aluminum Hydroxides and Oxyhydroxides,” Clays Clay Miner. (1985), 33, 181.

15. Violante, A. and Huang, P.M.: “Formation Mechanism of Aluminum Hydroxide Polymorphs,” Clays Clay Miner., (1993), 41, 590.

16. Toxicity Results of a Chrome-free lignosulfonate mud containing 6.0 ppb of Alplex. Fluids Technology Regulatory compliance laboratory report. 6144US. June 20,1995

17. Toxicity Results of a Pyro-Drill mud system containing 3.0 ppb of Alplex. Fluids Technology Regulatory compliance laboratory report. 6145US. June 22,1995

18. Effects of Alplex on Skeletonema Costatum in a marine algae growth inhibition test. Regulatory compliance laboratory report.6264A. February 27,1996

19. Acute lethal tpxicity results of Alplex to Acarita Tonsa. Regulatory compliance laboratory report.6264AT. February 27,1996

20. Effects of Alplex on Chorophium Volutator in a 10-day static sediment toxicity test. Regulatory compliance laboratory report.6264CV. April 2 ,1996.

21. The toxicity to Turbot(Scophtalmus maximus) of Alplex. Report for Baker Hughes Inteq. Chemex International plc. July 2001.Refernce ENV5396/010110.

SI Metric Conversion Factors

bbl × 1.589873 E−01 = m3

gal × 3.785412 E−03 = m3

cp × 1.0 E−03 = Pas inch × 2.54 E+00 = cm lbm × 4.535924 E−01 = kg ft × 3.04 E−01 = m psi × 6.894757 E+00 = kpa psi × 6.894759 E−02 = bar ppg × 2.853 E+00 = kg/m3

lbm/gal × 1.198264 E+02 = kg/m3

lb/100 ft2 × 4.788026 E−01 = Pa (°F-32) ÷1.8 E+00 = °C

TABLE 1 - Examples of Aluminum Compounds Name Formula Water

Solubility Aqueous

Solution pH Aluminum Chloride

AlCl3 S <7

Aluminum Sulfate

Al2(SO4)3•16 H2O S <7

Potassium Alum

KAl(SO4)2•12 H2O S <7

Aluminum Lactate

Al(C3H5O3)3 S <7

Aluminum Stearate

Al[O2C(CH2)16CH3]3 I ―

Sodium Aluminate

NaAlO2 or Na2O•Al2O3

S >7

S=Soluble I=Insoluble

TABLE 2 – Typical Mud Formulation for Ecuadorian Well Component Concentration

Bentonite 9.0 lb/bbl PHPA 1.5 lb/bbl

Aluminum Complex 3.5 lb/bbl Amine 5.0 lb/bbl

Low Vis PAC 1.0 lb/bbl Regular PAC 0.7 lb/bbl

Blown Asphalt 4.0 lb/bbl

TABLE 3- Ecological and Toxicological Data for AHC Test Method Result

US EPA M. bahia LC50 for 6 ppb in Chrome-Free Lignosulsonate System (See Table 9)

>1,000,000 ppm suspended particulate

phase 72hr EC50 Skeletonema costatum 1250 mg/L Acartia tonsa 48 hour LC50 >1000 mg/L 96hr LC50 Scophthalamus maximus (mg/l) >1800 5 day EC50 Abra alba (ppm total medium) 289 28 day Aerobic Biodegradation (OECD 306), %

21 (Organic component)

Bioaccumulation Potential (Octanol/water partition co-efficient – log Pow)

2.4

HQ Band Gold (No Substitution Warning)

TABLE 4 - Seawater Mud Formulation for US EPA Mysidopsis bahia bioassay

Component Concentration AHC 6 lb/bbl Bentonite 20 lb/bbl Carboxymethyl Cellulose 0.5 lb/bbl Lignite 3.0 lb/bbl Sulfonated Styrene Copolymer 0.5 lb/bbl Xanthan Gum 5.0 lb/bbl Chrome-free Lignosulfonate 1.0 lb/bbl Sodium Hydroxide 1.0 lb/bbl Soda Ash 1.0 lb/bbl Barite 137 lb/bbl

GL

Indiferenciado

Orteguaza

Tena

M-1 LmstM-2 LmstA LmstU SstMNShB Lmst

T Sst

LNShUpper Hollin

Intrusive

Upper Hollin

Main Hollin

TD

NAPO

YURALPA FIELD

PROGNOSED LITHOLOGY

GL

Indiferenciado

Orteguaza

Tena

M-1 LmstM-2 LmstA LmstU SstMNShB Lmst

T Sst

LNShUpper Hollin

Intrusive

Upper Hollin

Main Hollin

TD

NAPO

YURALPA FIELD

PROGNOSED LITHOLOGY

Figure 1 – Yuralpa Field Location in the Jungle of Ecuador

H HOH

Figure 2 – Configuration of soluble aluminum salts

Figure 3 – Hydrolysis of aluminum cations

Octahedral Tetrahedral

H

HH

H H

HH

H

H H

Al+3A

HO

OHHO

Al+3 + H2O Al(OH)+2 + H+

Al+3 + 2H2O Al(OH)2+ + 2H+

Al+3 + 3H2O Al(OH)3 + 3H+

Al(OH)4- + 4H+Al+3 + 4H2O

Al(OH)4- + H+ Al(OH)3 + H20

pH Controlled Distribution Al(OH)3

Al(OH)4

-

Aluminum Hydroxide Aluminate

Figure 4– Hydrolysis of aluminum cations and precipitate formation

CRYSTALLINE GELATINOUS

Trihydroxides Al(OH)3

Gibbsite Bayerite

Amorphous Oxide-hydroxides Pseudoboehmite AlO(OH)

Norstrandite

Figure 5 – Crystalline and non-crystalline or gelatinous forms of aluminum

hydroxide

170

2% SEA SALT Borehole: 195 psi 160 (TYPICAL) Confining: 315 psi

Temperature: 158F (70C) 150 Core: Pierre II

Equilibration time: 9 hours 140 20% KCl 130

FO

RM

ATI

O N

PR

ESSU

RE

120

110 20% KCl / 0.1% PHPA / 1% PAC

100

90 5 ppb Aluminum Complex / 0.1% PHPA /1% PAC 80

70

60

5 ppb Aluminum Complex / 0.1% PHPA /1% PAC 50

40

0 10 20 30 40 50 60 70 80 90 100 110

HOURS

Figure 6 – Pore Pressure Transmission of aluminum based drilling fluid

Wellbore filled

Al pH 6 -pH 10 -

Al

Cutti

Al

Shale

PHPA Gel encapsulation impregnated with

Enlarged Microfracture with filtrate invasion Lower pH results in f ti f Al(OH)

Figure 7 - Wellbore stability is enhanced by precipitation of aluminum hydroxides within shale pore throats and microfractures. Drill solids integrity is maintained by a combination of partially hydrolyzed polyacrylamide and aluminum complex.

Figure 8 – Oxygen Demand Biodegradation Test-Aluminun Complex/Amine

Figure 9 – Biodegradation Curve-Fluid: Aluminum Complex/Amine

TOTAL WELL COST

0

2

4

6

8

10

12

Well A Well B Well C

$MM

Figure 10 – Field application of aluminum-based drilling fluid to replace potassium Inhibited fluid system in the Yuralpa field-Ecuador

0

1

2

1 2 3 4 5 6 7

bbl/ft

3 per. Mov. Avg. (bbl/ft)

K Mud

Aluminum Complex Mud

Figure 11– Performance review of Aluminum Complex Mud vs K Mud regarding waste volumes reported

as bbl waste per foot hole drilled.